Guest Column: William Hauk

Is this a ‘K’ recession?

RECESSIONS – typically defined as two consecutive quarters of declining economic output – are always painful in terms of how they affect our economic well-being. Fortunately, they eventually end and a recovery begins.

But not all recoveries or recessions look the same. And economists have a tendency to compare their varying paths with letters of the alphabet.

Here’s a guide to some of the most commonly used letters.

“V” for victory. While recessions are never a good thing, the “Vshaped” recovery is deemed the bestcase scenario. In a recession with a V shape, the decline is rapid, but so is the recovery.

A good example of this type of recession took place in 1981 and 1982. That recession occurred after then-Federal Reserve Chair Paul Volcker rapidly raised interest rates beginning in 1979 in an effort to curb high inflation. This caused a sharp recession – leading to what was then the highest unemployment rate in the U.S. since the Great Depression.

But outside of economic circles, this recession is little remembered. Why? Primarily because the recovery was so rapid. After Volcker began cutting interest rates in the second half of 1982, the economy entered a recovery as sharp as the recession.

‘U’ and a long bottom. Conversely, a “U-shaped” recession generally has a longer duration, both for the downturn and the recovery period. The 2001 recession that followed the dot-com bubble and the 9/11 attacks fit into this category.

In some ways, the post-dot-com recession was a mild one. The fall in employment from the job market’s peak in February 2001 until the trough in August 2003 was only slightly less than 2%. Yet it took over two years of decline for the economy to bottom out, and it took another year and a half for the number of jobs to exceed the pre-recession peak. Furthermore, the amount of time spent near the bottom of the recession was relatively long.

The reclining “L.” The last U.S. recession, which coincided with the financial crisis of 2008, was especially brutal.

Economists call it an “L-shaped” recession because there was an initial sharp downturn, but a very plodding recovery. To see the L, you need to imagine the letter sort of reclining backward on its end.

The economy declined rapidly after the September 2008 failure of Lehman Brothers, and employment plunged about 6.3% from its pre-recession peak before reaching its low point. The pace of job creation in the recovery was very slow. It took almost 4½ years to recover all the jobs lost.

“K” and a two-track recovery. It may be hard to see how a K could be applied to data on a graph, but it’s the letter increasingly being used to describe the path of the current recession and eventual recovery.

Fed Chair Jerome Powell didn’t call it a “K,” but that’s basically what he meant when he discussed the current economic trajectory in a recent address. He expressed concerns that the U.S. will experience a “two-track recovery” in which things get better quickly for some people, while staying bad for others.

Is that the kind of recession we’re in?

It’s unclear. So far, looking at the whole economy, the U.S. has what has been called a “checkmark” or “swoosh” recession. It began to look something like a V, with a sharp drop in employment and then the beginnings of a rapid increase. But that recovery has begun to stall – though not for everyone.

As Powell suggested, the recovery could look different to various groups. White-collar workers may see a “V,” as their jobs are more capable of being done remotely. Blue-collar workers are seeing something closer to a U or L.

Recessions are tough for anyone to live through. However, the shape of the recovery can make it more or less bearable. n

Not all recoveries or recessions look the same.

William Hauk is an associate professor of economics at the Darla Moore School of Business at the University of South Carolina. Distributed by The Associated Press.

PROFILES OF SUCCESS

This publication is designed to help you promote: • An anniversary, accomplishment or milestone event • A new product line or service • Uniqueness and competitive edge • Brand and image in the community • Your team of professionals

RHODE ISLAND INFRASTRUCTURE BANK RHODE ISLAND INFRASTRUCTURE BANK

Rhode Island Rhode Island Infrastructure Bank Infrastructure Bank is Rhode Island’s is Rhode Island’s central hub for central hub for financing infrastructure financing infrastructure improvements improvements for municipalities, for municipalities, businesses, and businesses, and homeowners. We homeowners. We leverage capital in a leverage capital in a revolving fund to offer revolving fund to offer innovative financing for innovative financing for an array of infrastructurean array of infrastructurebased projects including based projects including water and wastewater, water and wastewater, road and bridge, energy road and bridge, energy efficiency, brownfield efficiency, brownfield remediation and climate remediation and climate resiliency. These quality resiliency. These quality of life projects improve of life projects improve the State’s infrastructure, the State’s infrastructure, create jobs, promote create jobs, promote economic development economic development and enhance the and enhance the environment. environment.

Jeffrey R. Diehl Jeffrey R. Diehl Executive Director and Executive Director and Chief Executive Officer Chief Executive Officer OOriginally established by the Rhode Island General Assembly in 1989 as the Clean Water Finance Agency, the Infrastructure Bank’s mission was significantly expanded in 2015 to include energy, brownfield remediation and climate resiliency initiatives. The Infrastructure Bank’s expanded mandate has significantly enhanced its ability to provide competitive financing to a broad variety of infrastructure-based projects.

HOW WE WORK HOW WE WORK

STEP 1 • Generally, we partner with communities and a state agency to identify viable infrastructure projects • The state agency determines project eligibility, while the Bank determines financing structure

STEP 2 • The Bank and its partner agency work collaboratively with borrowers to prepare project applications

STEP 3 • Project applications are submitted to the partner agency, which ranks all applications using a scoring criteria to produce a Project Priority List (PPL)

STEP 4 • The Bank will strategize with prospective borrowers to determine the most efficient way to finance the project

STEP 5 • The Bank makes periodic disbursements as the project proceeds in conjunction with site reviews conducted by our partner agency • Loans are repaid over time and the recycled funds are used to make additional loans

PROGRAMS PROGRAMS

BROWNFIELDS REVOLVING LOAN FUND The Brownfields Revolving Loan Fund provides financing for the remediation of contaminated brownfield sites to return these sites to productive use.

CLEAN WATER STATE REVOLVING FUND The Clean Water State Revolving Fund is a program through which local governmental units, quasi-public agencies and private entities can access affordable, long-term financing for the completion of wastewater, stormwater and other water pollution abatement projects. COMMERCIAL PROPERTY ASSESSED CLEAN ENERGY The Commercial Property Assessed Clean Energy (C-PACE) program provides 100% long-term fixed rate financing for energy efficiency and renewable energy improvements to commercial and industrial buildings.

COMMUNITY SEPTIC SYSTEM LOAN PROGRAM The Community Septic System Loan Program provides interest free financing to homeowners for the repair or replacement of failed, failing or substandard septic systems, or to replace a cesspool with a septic system.

US Extruders, a manufacturer of screws US Extruders, a manufacturer of screws and extruders located in Westerly, financed and extruders located in Westerly, financed the installation of a 210.4 kW rooftop solar the installation of a 210.4 kW rooftop solar installation using the Commercial Property installation using the Commercial Property Assessed Clean Energy (C-PACE) program. Assessed Clean Energy (C-PACE) program. Providence Water crews replace a residential Providence Water crews replace a residential customer’s lead service line. A project made possible customer’s lead service line. A project made possible through the Bank’s lead-pipe replacement program. through the Bank’s lead-pipe replacement program.

8 | DECEMBER 2019 | PROVIDENCE BUSINESS NEWS ■ PROFILES OF SUCCESS | www.pbn.com

Officials break ground to mark the construction of Warren’s Officials break ground to mark the construction of Warren’s Wastewater Treatment Facility, a project financed through Wastewater Treatment Facility, a project financed through the Bank’s Clean Water State Revolving Fund. the Bank’s Clean Water State Revolving Fund.

DRINKING WATER STATE REVOLVING FUND The Drinking Water State Revolving Fund is a financing program through which RIIB makes low-interest loans to community public water systems, non-profit noncommunity public water systems, privatelyorganized water suppliers and local governmental units to complete drinking water infrastructure projects.

EFFICIENT BUILDINGS FUND The Efficient Buildings Fund makes lowinterest, long-term financing available to municipalities and quasi-public agencies for the completion of energy efficiency and renewable energy projects.

FACILITY PLAN LOAN PROGRAM The Facility Plan Loan Program provides financing to local governmental units for the completion of water pollution abatement project facility plans, and amendments to such plans.

MUNICIPAL ROAD AND BRIDGE REVOLVING FUND The Municipal Road and Bridge Revolving Fund is a program through which local governmental units can access below market, long-term financing for transportation infrastructure projects. MUNICIPAL RESILIENCE PROGRAM The Municipal Resilience Program (MRP) provides direct support to Rhode Island cities and towns to deploy a planning process which identifies the local climate change vulnerabilities and community strengths.

Upon successful completion of the planning process, municipalities will be designated as a “Resilient Rhody Municipality” which enables the cities and towns to apply for dedicated action grants to implement priority projects, which address the vulnerabilities uncovered through the initial phase.

RHODE ISLAND WATER POLLUTION CONTROL REVOLVING FUND The Rhode Island Water Pollution Control

2019 2019

COMPANY INFORMATION

Our mission is to actively support and finance investments in Rhode Island’s infrastructure. The Infrastructure Bank does so through a variety of means, including the issuance of bonds, originating loans and grant making. Through its activities, the Bank fosters infrastructure improvements that create jobs, promote economic development and enhance the environment.

ADDRESS

235 Promenade St. Suite 119 Providence, RI 02908

NUMBER OF EMPLOYEES

14

YEAR ESTABLISHED

1989 401.453.4430

riib.org

info@riib.org

RIinfrastructure/

RI_InfraBank

 LEGACY LEGACY

30 YEAR ANNIVERSARY 30 YEAR ANNIVERSARY Revolving Fund provides financing for projects that reduce water pollution and may not meet the eligibility requirements of federal programs, such as the Clean Water State Revolving Fund. SEWER TIE-IN LOAN FUND The Sewer Tie-In Loan Fund provides interest free financing to homeowners wishing to connect their residence to a local sewer system and to properly abandon an existing septic system. STORMWATER PROJECT ACCELERATOR The Stormwater Project Accelerator provides upfront capital for green stormwater infrastructure projects that will eventually be funded through state and local reimbursement grants.

Share your story

www.pbn.com | PROFILES OF SUCCESS ■ PROVIDENCE BUSINESS NEWS | DECEMBER 2019 | 9

Your company’s profile in this section features a two-page spread of text, photos and an info box highlighting your company’s vital statistics.

To participate in this year’s edition, contact your Account Manager or Advertising@PBN.com | 401-680-4800

MATERIAL DEADLINE: November 20, 2020 PUBLICATION DATE: December 18, 2020 STATEMENT OF OWNERSHIP, MANAGEMENT AND CIRCULATION

1. Publication Title: Providence Business News 2. Publication Number 2254 3. Filing Date: 10/1/2020 4. Issue Frequency: Weekly 5. Number of Issues: 52 6. Annual Subscription Price: $99.00 7. Complete Mailing Address of Known Office of Publication: 400 Westminster St. Fl 6, Providence, RI 02903 8. Complete Mailing Address of Headquarters or General Business Office of the Publisher: 400 Westminster St. Fl 6,

Providence, RI 02903 9. Full Names and Complete Mailing Address of Publisher, Editor and Managing Editor: Publisher: Roger Bergenheim, 400 Westminster St. Fl 6, Providence, RI 02903 Editor: Michael Mello, 400 Westminster St. Fl 6, Providence, RI 02903 Managing Editor: William Hamilton, 400 Westminster St. Fl 6, Providence, RI 02903 10. Owner: Roger Bergenheim, 400 Westminster St. Fl 6, Providence, RI 02903 11. Known Bondholders, Mortgages, and Other Security Holders Owning or Holding 1 Percent or More of the Total

Amount of Bonds, Mortgages or Other Securities: None. 12. N/A 13. Publication Name: Providence Business News 14. Issue Date of Circulation Data Below: 9/18/2020 15. Extent and Nature of Circulation Average No. Copies Each Issue During Preceding 12 Months Actual No. Copies of Single Issue Published Nearest to Filing Date

A. Total No. of Copies (Net Press Run) ...................................................................7,000 B. Paid Circulation (By mail/outside the mail) (1) Mailed Outside County Paid Subscriptions ...................................................2,281 (2) Mailed In-County Paid Subscriptions .............................................................2,911 (3) Paid Distribution outside the mails including sales through dealers and counter sales ..................................................................................113 (4) Paid Distribution by Other Classes of Mail ...........................................................0 C. Total Paid Distribution .........................................................................................5,305 D. Free or Nominal Rate Distribution (1) Free or Nominal Rate Outside County ..............................................................781 (2) Free or Nominal Rate Inside County ...................................................................80 (3) Free or Nominal Rate Mailed at Other Classes .....................................................0 (4) Free or Nominal Rate Outside the Mail .............................................................130 E. Total Free or Nominal Rate Distribution .................................................................991 F. Total Distribution ..................................................................................................6,296 G. Copies Not Distributed ...........................................................................................704 H. Total (sum of F and G) .........................................................................................7,000 I. Percent Paid .......................................................................................................84.3% ............................................7,000

............................................2,527 ............................................2,985

...................................................0 ...................................................0 ............................................5,512

............................................1,108 .................................................77 ...................................................0 ...................................................0 ............................................1,185 ............................................6,697 ...............................................303 ............................................7,000 ...........................................82.3%

16. Electronic Copy Circulation A. Paid Electronic Copies ...........................................................................................348 B. Total Paid Print Copies (Line 15c) + Paid Electronic Copies (Line 16a) .............5,653 C. Total Print Distribution (Line 15f) + Paid Electronic Copies (Line 16a) ...............6,644 D. Percent Paid (Both Print & Electronic Copies) (16b divided by 16c x 100) ......85.1% ...............................................318 ............................................5,830 ............................................7,015 ...........................................83.1%

17. Roger Bergenheim, Publisher .........................................................................................................Date: October 1, 2020 I certify that all the information on this form is true and complete. I understand that anyone who furnishes false or misleading information on this form or who omits information requested on the form may be subject to criminal sanctions (including fines and imprisonment) and/or civil sanctions (including civil penalties).